CISLAC DECRIES SUDDEN CRAVE FOR FOREIGN DEBTS BY STATE GOVERNORS

CISLAC DECRIES SUDDEN CRAVE FOR FOREIGN DEBTS BY STATE GOVERNORS

CISLAC DECRIES SUDDEN CRAVE FOR FOREIGN DEBTS BY STATE GOVERNORS

 
The Civil Society Legislative Advocacy Centre wishes to condemn the sudden crave for foreign debts by state governors in the nation. We consider this development as portending dangers for sustainable development, reducing the options for development for future generations of Nigerians and possessing traits of generational inequity.
It will be recalled that under the 2012/14 Medium Term External Borrowing Plan (revised) and the much touted pipeline projects in the Medium Term Expenditure Framework 2012-2014, the Federal and State Governors seek to borrow the $7.9 billion in foreign loans. We find it worrisome that as at September 2012 our external debt reportedly escalated to $6.2 billion, a domestic debt profile ofN6.3trn and that the nation’s debt profile could rise as high as $25 billion by 2015.
CISLAC finds it even more disturbing that in spite of the claim by the Federal Ministry of Finance that the loans are being obtained at concessionary rates, there are indications that at least $5.34 billion of the $7.9 billion foreign loans will go back to the lenders in form of interests, service charges, commitment charges and management fees within the 10-year moratorium period alone.
We recall that while presenting the 2012 budget proposal to the National Assembly, President Goodluck Jonathan had lamented that the domestic debt had been growing at an alarming rate in recent years.  We find the development that calls for spending N591.76bn on the servicing of domestic and foreign debts in 2013, up from 560bn in 2012 very, disheartening as this will only continue to rise.
CISLAC wishes to particularly condemn the seeming race by state governors to outdo each other on who borrows first and most. Their posture toward the Federal Ministry of Finance and the Senate in their quest for external borrowings is unprecedented. We wish to remind all the stakeholders that the arguments advanced for this frenzy is similar to those advanced by their predecessors who plunged the nation into the debt that necessitated a negotiation for debt forgiveness seven years ago.
We remind the governors that citizens are yet to trust their ability to manage resources efficiently, prudently and transparently. As at now, we are aware that many of the states do not have procurement laws and fiscal responsibility laws. We also remind them that many of them depend heavily on federal allocations and possess dismal records of internally generated revenue and so their proposed repayment plans at best speculations that may only further impoverish the people of their states.
CISLAC wonders why such crucial issues like external borrowings are not open to public input and heralded by debates and dialogue before they are embarked upon considering that the burden of repayment will ultimately fall on the people. Loans obtained and spent are tax payers’ monies spent in advance and the question of generational equity comes to play. Why should a governor who has just 3 years left in office borrow millions of dollars to be paid in 15 years without consulting those who must bear the burden of paying both loan and interest after the gestation period?
It is rather strange that state governors who had previously lamented the rising debt profile of the Federal government and condemned the renewed quest for foreign loans have joined in the fray to engage in the same vocation. We consider the flaunting of figures and comparisons with international of debt to GDP ratios to justify the loans an aberration as it is obvious that a nation that occupies the lowest levels of corruption perception index, and notorious for wastages and patronage operates on standards that fall short of those to whom the figures and rations apply.
We call on the State governors to re-think their positions and jettison the idea of external borrowing and devise creative means of generating resources to fund development without endangering the welfare of future generations.
CISLAC calls on the federal government and the national assembly to also revisit the Medium Term External Borrowing Plan 2012-2014 and review it and open the process of external borrowings to public debate and dialogue to engage citizens whose resources will be deployed for subsequent repayment of the loans obtained. Borrowings relates to issues of tax justice, generational equity and sustainable development.
We call on civil society and the media to embark on public enlightenment and citizens’ education to mobilize public opinion and enhance informed debates at all levels. National indebtedness affects all Nigerians, our national pride, socio-economic development and future economic welfare and well-being are at stake. The resources to be used for repayment will be from our commonwealth, either resource revenue or taxes and the opportunity cost of servicing the debts is the development and social services we have to forfeit. We must therefore demonstrate interest and commitment to ensuring that we participate in the decision making process that leads to all forms of borrowings be they domestic or external.
Signed:
Auwal Ibrahim Musa
Executive Director,
CISLAC

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